The Indian rupee weakened against the US dollar in early trading on Monday, falling by 25 paise to 82.46. The decline can be attributed to the rise in crude oil prices and a negative trend in the domestic equity market.
The rupee opened weak at 82.44 against the dollar and then continued to decline to 82.46, marking a 25-paise drop from its previous close. On Friday, the rupee settled at 82.21 against the dollar. The increase in crude oil prices, with Brent crude futures rising 5.50% to USD 84.28 per barrel, further weighed on the rupee.
Experts have suggested that the rupee may appreciate but remain limited to the 81.50-81.80 zone. The upside for the week is expected to remain protected towards 82.70-82.90. The upcoming events to look out for this week include the RBI policy on April 6 and US payrolls on April 7.
The Reserve Bank’s Monetary Policy Committee (MPC) will meet from April 3-6 to take into account various domestic and global factors before coming out with the first bi-monthly monetary policy for fiscal 2023-24. The RBI has already increased the repo rate by a total of 250 basis points since May in an attempt to control inflation, although it has remained above the central bank’s comfort zone of 6% most of the time.
The domestic equity market was also trading lower, with the 30-share BSE Sensex declining by 64.56 points or 0.11% to 58,926.96. The broader NSE Nifty also fell by 9.60 points or 0.06% to 17,350.15. Foreign Institutional Investors (FIIs) were net buyers in the capital markets on Friday, purchasing shares worth Rs 357.86 crore, according to exchange data.
